Audit: Chelmsford's finances tidy

CHELMSFORD -- An audit of town finances has found records to be well-kept and reconciled on a regular basis, and the auditor made no major recommendations, the Board of Selectmen was told Monday.

"The audit went very well," said Scott McIntire of the auditing firm Melanson Heath & Company. "We didn't propose any major adjustments as a result."

One area of concern McIntire cited is retirement and other postemployment benefits for town workers, something town officials have already called a major issue in coming years. Liabilities have piled up as health-care costs rise, employees live longer and fewer active employees pay into the system.

The town's liability for these costs rose by $7.6 million in the last year, according to the audit, bringing the total to $33.6 million in net obligations. That is almost four times the total only three years before.

Town Meeting last month approved adding $1 million into a fund for postemployment benefits. Only $280,000 had been in the fund.

The auditors made two specific recommendations: Develop a more formal risk-assessment process, and match capital-asset additions with expenditures.

Chelmsford informally performs its own risk assessment for possible fraud through various policies and procedures, but the auditors said officials could implement specific monitoring activities as well. The auditors also suggested developing procedures for matching new capital assets with current-year expenditures to ensure consistent accounting.

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The audit also checked on how the town did on recommendations it made a year ago.

In sewer-account receivables, the auditors had recommended formal reconciliation procedures between the town accountant and Sewer Department. Informal monthly reconciliations were made but they were not formally documented, the auditors said.

The town also did not implement a recommendation to audit student-activity funds. But town officials said the School Committee is working on policies for those funds and that the school business manager plans to conduct internal audits.

Town Finance Director John Sousa, Superintendent of Schools Frank Tiano and Business Manager Kathy McWilliams attended the presentation but none spoke. Selectman Matt Hanson called the positive review a testament to hard work by employees in Town Hall.

In June, the credit-rating agency Standard & Poor's improved the town's rating to AA from AA-, citing "sustained improvement in the town's financial position and performance."

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